To My Clients:
Our accounts were up 1.01% during the first quarter of this year. The major stock market indexes are all down between 3-13%.
The current recession, the longest and deepest in decades is the result of massive debt defaults and deleveraging. Banks are now undercapitalized and are preserving capital by tightening lending standards (if they lend at all) resulting in a vicious cycle of a shrinking economy making money become even more scarce. Read more…
Asset Allocation, Banks, Bonds, Economics, Financial Crises, Gold, Markets, Portfolio Management Banks, Bonds, collapse, debt, economy, fiscal policy, Gold, monetary policy, performance, Portfolio Management, stock market, strategy, The Fed
This April 15 is the 94th year that Americans have had to file an income tax. For most Americans, the day is a non-event. The federal and state governments have already collected the taxes due by withholding from each paycheck over the course of the calendar year. Most Americans never saw the money and have no real idea that they earned it. Few Americans realize that over the last 94 years they have been enserfed and have no more rights to their own labor than medieval serfs or 19th century slaves.
Read more…
Economics Economics, taxes
Robert Samuelson posted an article today about what he thinks China is up to: China Engages in Dollar Deception.
Given the dollar’s drawbacks, why not switch to something else, as Zhou suggests? The trouble, as even he concedes, is that there’s no obvious replacement. The attraction of an international currency depends on its presumed stability, what it will buy and how easy it is to invest. The euro (27 percent of government reserves) and the yen (3 percent) don’t yet rival the dollar. As for China, it hasn’t made its own currency (the renminbi, or RMB) automatically convertible for Chinese investments.
We’re stuck with the dollar standard for a while. To work, it requires that countries with huge trade surpluses reduce the export-led growth that fed the system’s instabilities. The Chinese increasingly recognize this. “They’re very aware of the need to promote consumer spending,” says economist Pieter Bottelier of Johns Hopkins University. In November, China announced a 4 trillion RMB ($586 billion) “stimulus.” In addition, says Bottelier, the government is improving health and pension benefits to dampen households’ need for high savings.
Currencies, Economics Currencies, Economics, exchange rates
